Common use of ECT Proceedings Clause in Contracts

ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified an HP Inc. subsidiary in Brazil (“HP Inc. Brazil”) that it had initiated administrative proceedings to consider whether to suspend HP Inc. Brazil’s right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Inc. Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Inc. Brazil it had decided to apply the penalties against HP Inc. Brazil and suspend HP Inc. Brazil’s right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Inc. Brazil appealed ECT’s decision. In April 2013, ECT rejected HP Inc. Brazil’s appeal, and the administrative proceedings were closed with the penalties against HP Inc. Brazil remaining in place. In parallel, in September 2011, HP Inc. Brazil filed a civil action against ECT seeking to have ECT’s decision revoked. HP Inc. Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Inc. Brazil’s request for injunctive relief. HP Inc. Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Inc. Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT’s sanctions until a final ruling on the merits of the case. HP Inc. expects the decision to be issued in 2015 and any subsequent appeal on the merits to last several years. Abstrax Proceeding. On February 28, 2014, Abstrax, Inc. (“Abstrax”), a company with a principal place of business in Mesa, Arizona, filed a patent infringement lawsuit against HP Inc. Abstrax claimed to market software for sales operations and manufacturing operations for configurable products, including those in the custom shutter industry. The case was pending in U.S. District Court for the Eastern District of Texas, Marshall Division. Abstrax asserted one patent, U.S. Patent 6,240,328, which is directed generally to a method of generating assembly instructions. In its complaint, Abstrax claimed that HP Inc.’s methods and processes of manufacturing configurable servers, storage, networking devices, PCs, laptops, imaging and printing devices and their sub-systems infringe its patent, as do the products made by the accused processes. Abstrax also claimed that HP Inc.’s alleged infringement was willful and that the case was exceptional. On November 14, 2014, HP Inc. filed a petition with the U.S. Patent and Trademark Office challenging the validity of the Abstrax patent based on prior art. In late January 2015, Abstrax dropped its infringement allegations against the manufacturing of PCs and imaging and printing devices from its expert reports. On March 4, 2015, the court heard HP Inc.’s motion challenging the subject matter of the patent under 35 U.S.C. Section 101. Trial was scheduled for May 11, 2015. The parties settled the matter in April 2015. The district court litigation was dismissed on May 5, 2015. HP Inc.’s challenge to the validity of the patent was terminated on May 18, 2015.

ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified an HP Inc. subsidiary in Brazil (“HP Inc. Brazil”) that it had initiated administrative proceedings to consider whether to suspend HP Inc. Brazil’s right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Inc. Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Inc. Brazil it had decided to apply the penalties against HP Inc. Brazil and suspend HP Inc. Brazil’s right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Inc. Brazil appealed ECT’s decision. In April 2013, ECT rejected HP Inc. Brazil’s appeal, and the administrative proceedings were closed with the penalties against HP Inc. Brazil remaining in place. In parallel, in September 2011, HP Inc. Brazil filed a civil action against ECT seeking to have ECT’s decision revoked. HP Inc. Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Inc. Brazil’s request for injunctive relief. HP Inc. Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Inc. Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT’s sanctions until a final ruling on the merits of the case. HP Inc. expects the decision to be issued in 2015 and any subsequent appeal on the merits to last several years. Abstrax Proceeding. On February 28, 2014, Abstrax, Inc. (“Abstrax”), a company with a principal place of business in Mesa, Arizona, filed a patent infringement lawsuit against HP Inc. HP. Abstrax claimed claims to market software for sales operations and manufacturing operations for configurable products, including those in the custom customer shutter industry. The case was is pending in U.S. District Court for the Eastern District of Texas, Marshall Division. Abstrax has asserted one patent, U.S. Patent 6,240,328, which is directed generally to a method of generating assembly instructions. In its complaint, Abstrax claimed claims that HP Inc.HP’s methods and processes of manufacturing configurable servers, storage, networking devices, PCs, laptops, imaging and printing devices and their sub-systems infringe its patent, as do the products made by the accused processes. Abstrax also claimed claims that HP Inc.HP’s alleged infringement was is willful and that the case was is exceptional. On November 14, 2014, HP Inc. filed a petition with the U.S. Patent and Trademark Office challenging the validity of the Abstrax patent based on prior art. In late January 2015, Abstrax dropped its infringement allegations against the manufacturing of PCs and imaging and printing devices from its expert reports. On March 4, 2015, the court heard HP Inc.HP’s motion challenging the subject matter of the patent under 35 U.S.C. Section 101. Trial was is scheduled for May 11, 2015. The parties settled have entered into a binding term sheet to settle this matter, including payment of $14 million by HP, and have moved to stay the matter litigation for 30 days in April 2015. The district court litigation was dismissed on May 5, 2015. HP Inc.’s challenge order to the validity of the patent was terminated on May 18, 2015complete a final settlement agreement.

ECT Proceedings. In January 2011, the postal service of Brazil, Empresa Brasileira de Correios e Telégrafos (“ECT”), notified an HP Inc. subsidiary of Parent in Brazil (“HP Inc. Brazil”) that it had initiated administrative proceedings to consider whether to suspend HP Inc. Brazil’s right to bid and contract with ECT related to alleged improprieties in the bidding and contracting processes whereby employees of HP Inc. Brazil and employees of several other companies allegedly coordinated their bids and fixed results for three ECT contracts in 2007 and 2008. In late July 2011, ECT notified HP Inc. Brazil it had decided to apply the penalties against HP Inc. Brazil and suspend HP Inc. Brazil’s right to bid and contract with ECT for five years, based upon the evidence before it. In August 2011, HP Inc. Brazil appealed ECT’s decision. In April 2013, ECT rejected HP Inc. Brazil’s appeal, and the administrative proceedings were closed with the penalties against HP Inc. Brazil remaining in place. In parallel, in September 2011, HP Inc. Brazil filed a civil action against ECT seeking to have ECT’s decision revoked. HP Inc. Brazil also requested an injunction suspending the application of the penalties until a final ruling on the merits of the case. The court of first instance has not issued a decision on the merits of the case, but it has denied HP Inc. Brazil’s request for injunctive relief. HP Inc. Brazil appealed the denial of its request for injunctive relief to the intermediate appellate court, which issued a preliminary ruling denying the request for injunctive relief but reducing the length of the sanctions from five to two years. HP Inc. Brazil appealed that decision and, in December 2011, obtained a ruling staying enforcement of ECT’s sanctions until a final ruling on the merits of the case. HP Inc. Parent expects the decision to be issued in 2015 and any subsequent appeal on the merits to last several years. Abstrax Proceeding. On February 28, 2014, Abstrax, Inc. (“Abstrax”), a company with a principal place of business in Mesa, Arizona, filed a patent infringement lawsuit against HP Inc. Abstrax claimed to market software for sales operations and manufacturing operations for configurable products, including those in the custom shutter industry. The case was pending in U.S. District Court for the Eastern District of Texas, Marshall Division. Abstrax asserted one patent, U.S. Patent 6,240,328, which is directed generally to a method of generating assembly instructions. In its complaint, Abstrax claimed that HP Inc.’s methods and processes of manufacturing configurable servers, storage, networking devices, PCs, laptops, imaging and printing devices and their sub-systems infringe its patent, as do the products made by the accused processes. Abstrax also claimed that HP Inc.’s alleged infringement was willful and that the case was exceptional. On November 14, 2014, HP Inc. filed a petition with the U.S. Patent and Trademark Office challenging the validity of the Abstrax patent based on prior art. In late January 2015, Abstrax dropped its infringement allegations against the manufacturing of PCs and imaging and printing devices from its expert reports. On March 4, 2015, the court heard HP Inc.’s motion challenging the subject matter of the patent under 35 U.S.C. Section 101. Trial was scheduled for May 11, 2015. The parties settled the matter in April 2015. The district court litigation was dismissed on May 5, 2015. HP Inc.’s challenge to the validity of the patent was terminated on May 18, 2015.